Tag Archives: songwriting

Licensing Previews is Absurd and Just Bad Business

In this article, Greg Sandoval writes about the “plight” of todays artist when it comes to digital music sales:

http://www.cbsnews.com/stories/2009/09/17/tech/cnettechnews/main5318276.shtml

In my personal opinion, performing rights societies are starting to overstep their bounds, trying to get more from an outdated business model, instead of adapting to the new market. Let’s go through this one point at a time, shall we?

“Songwriters, composers, and music publishers are making preparations to one day collect performance fees from Apple and other e-tailers for not just traditional music downloads but for downloads of films and TV shows as well. Those downloads contain music after all. “

Collecting performance fees from retailers is absurd. They already pay the copyright administrators to carry and sell your product in their sales commission/revenue split. The fees for music included as part of films and TV shows are included in synchronization contracts, and are negotiated at that time. It is ridiculous to charge the vendor of your finished product for your manufacturing costs. That would be like the grocery store that sells Kraft cheese having to pay Kraft’s dairy farmers. That is Kraft’s job. iTunes should not have to pay John Williams every time Star Wars: Episode 47 is downloaded from their store — they pay Lucas Films, and Lucas Films should be responsible for paying John Williams.

“These groups even want compensation for iTunes’ 30-second song samples.”

Charging music retailers a public performance fee for previews is absurd. It would be like charging a store that sells CDs every time a customer picks up a CD off the shelf to see who is on it before they decide to buy it. Currently, 30-second previews are covered by standard digital download mechanical licenses, and are a necessary part of selling the music online. People won’t buy a song unless they know what they are buying — just like I won’t buy a pair of pants without trying them on first. Charging music services for this will undercut digital music distribution in general and is bad business for an already suffering retail music industry. Like another blogger wrote: …”according to ASCAP/BMI’s logic Macy’s should have to pay Ralph Lauren money for people to try on clothes in their store.”

“But these royalty-collection groups say they’re at the bottom of the music-sector food chain and aren’t trying to gouge anyone. They say their livelihoods are threatened and wonder why movie studios, big recording companies, TV networks, and online retailers are allowed to profit from their work but they aren’t. ”
“We make 9.1 cents off a song sale and that means a whole lot of pennies have to add up before it becomes a bunch of money,” said Rick Carnes, president of the Songwriters’ Guild of America. “Yesterday, I received a check for 2 cents. I’m not kidding. People think we’re making a fortune off the Web, but it’s a tiny amount. We need multiple revenue streams or this isn’t going to work.”

Articles like this make it sound like composers aren’t getting their fair share. And it is simply not true at all. Any composer who is good at what they do, and has successfully marketed their work, and intelligently structured their contracts, is making a living. And Rick Carnes?? Who has heard anything by Rick Carnes?? THAT is why he only got a check for 2 cents. HE HASN’T WRITTEN ANYTHING ANYONE LISTENS TO!!!! Look him up on ASCAP or BMI. So he’s written a few hundred tunes that no one has ever heard of. SO HAVE I. So have 95% of Americans in the shower. That doesn’t mean he deserves to pay his bills with his music. He simply has not met the demands of the music marketplace with his product. Sounds to me like he is asking for a bail out. Why don’t we try quoting a musician who is actually making music that is in demand by the public?

I agree with Potter’s position — songwriters ARE getting paid for their download — they are getting their mechanical fee, which is 9.1 cents per copy (which happens to be set by law), they are getting their sync license fee for video downloads (which is determined at contract negotiation).

“In 2005, ASCAP entered into a rate-court proceeding to set licensing fees for the music services of Yahoo, AOL, and RealNetworks. A U.S. district judge for the Southern District of New York delivered a blow to composers and songwriters by ruling that downloading music from a Web store was not a music performance. On the other hand, the judge found that streaming music was subject to a performance fee.

“The songwriter gets a performance fee if the song is streamed without the video,” Carnes noted. “But if it is downloaded within an audio-visual work like a movie we don’t get a performance fee–same song, no money.”

Carnes is manipulating terms here, making it sound like the judge’s ruling was unfair. Songwriters don’t get performance fees from VHS or DVD sales either. No one complains about that! That’s because they get their mechanicals and sync fees, which they are (or should be) getting from downloads of those same movies. A download is a physical product sale, not a performance. Streaming is different than downloading. Streaming implies a real-time broadcast. In other words, if a download is a performance, then why am I still paying sales tax (tangible personal property tax) on a downloaded product? Artists have no right to collect a performance royalty for a product they are already being paid for. If the artists want more, they need to change the terms of the mechanical and sync payments. Change the mechanical fee to 15 cents a copy. Negotiate for better splits on sync rights. Don’t take it out on the consumer who has made you popular in the first place.

The moral of the story here is that ASCAP and BMI (and others), with all their good intentions to protect the intellectual property rights of their members, are now crossing the line and are further destroying the business of retail music, blaming it on technology, rather than embracing new media distribution channels. They are diminishing product availability, which hurts the two groups that ultimately pay the songwriters’ paychecks — the retailers and consumers.